CHAPTER 6: PERFORMANCE MANAGEMENT SYSTEM

Transcription

1 CHAPTER 6: PERFORMANCE MANAGEMENT SYSTEM 6.1 INTRODUCTION The purpose of this Chapter is to reflect the status quo of the City of Tshwane Metropolitan Municipality (CoT s) Performance Management System. 6.2 BACKGROUND Chapter 6 of the Local Government: Municipal Systems Act, 2000 (Act No. 32 of 2000), requires local government to: Develop a performance management system; Set targets, monitor and review performance based on indicators linked to the Integrated Development Plan (IDP); Publish an annual report on performance management for the councillors, staff, the public and other spheres of government; Incorporate and report on a set of general indicators prescribed nationally by the Minister responsible for local government; Conduct an internal audit on performance before tabling the report; Have the annual performance report audited by the Auditor-General; and Involve the community in setting indicators and targets and reviewing municipal performance. 6.3 OVERVIEW OF POLICIES GUIDING PERFORMANCE MANAGEMENT IN THE CoT POLICY FRAMEWORK On 28 August 2003, the Council adopted a Performance Management Framework regulating the Performance management system in the municipality. The Framework provides guidelines on the development and implementation of the organizational and individual performance management system. The approved framework provides the following guidelines on organizational performance management: Tshwane IDP First Revision 463

2 6.3.2 PLANNING FOR PERFORMANCE MANAGEMENT The IDP process and the performance management process are seamlessly integrated. The IDP fulfils the planning stage of Performance Management and Performance Management fulfils the implementation management, monitoring and evaluation of the IDP process PRIORITY SETTING The IDP delivers products such as, amongst others a set of delivery priorities and objectives, a set of internal transformation strategies, priorities and objectives, identified projects that contribute to the achievement of the above objectives and a financial plan SETTING OBJECTIVES All components of the IDP need to be translated into a set of clear and tangible objectives. The statement of objectives requires a tangible, measurable and unambiguous commitment to be made. In setting objectives, a municipality needs to: Carefully consider the results desired; Review the precise wording and intention of the objective; Avoid overly broad results statements; Be clear about the scope and nature of change desired; and Ensure that objectives are outcome and impact focused KEY PERFORMANCE INDICATORS The priorities and objectives contained in the IDP will guide the identification of indicators. The development of objectives should be clustered into key performance areas such as service delivery development, institutional transformation, governance and financial issues among others. The activities and processes identified in the IDP for achieving the developmental objectives as well as the resources earmarked must also be taken into account. The following general key performance indicators are prescribed in terms of section 43 of the Local Government: Municipal Systems Act, 2000 and must therefore be included: Tshwane IDP First Revision 464

3 The percentage of households with access to basic level of water, sanitation, electricity and solid waste removal. The percentage of households earning less than R1100 per month with access to free basic services. The percentage of a municipality s capital budget actually spent on capital projects identified for a particular financial year in terms of the municipality s integrated development plan. The number of jobs created through municipality s local economic development initiatives including capital projects. The number of people from employment equity target groups employed in the three highest levels of management in compliance with a municipality s approved employment equity plan. The percentage of a municipality s budget actually spent on implementing its workplace skills plan. Financial viability as expressed by the following ratios: A = B C D Where: A represents debt coverage B represents total operating revenue received C represents operating grants D represents debt service payments (i.e. interest redemption) due within the financial year; A = B C Where: A represents outstanding services debtors to revenue B represents total outstanding service debtors C represents annual revenue actually received for services Tshwane IDP First Revision 465

4 A= B + C D Where: A represents cost coverage B represents all available cash at a particular time C represents investments D represents monthly fixed operating expenditure SETTING TARGETS A municipality must, for each financial year set performance targets for each of the key performance indicators set by it. A performance target set in terms of sub-regulation (1) 1 must be: Practical and realistic; Measure the efficiency, effectiveness, quality and impact of the performance of the municipality; Identify administrative components, structures, bodies or persons for whom a target has been set; Commensurate with available resources and the municipality s capacity; and Consistent with the municipality s development priorities and objectives set out in its integrated development plan REVIEW OF KEY PERFORMANCE INDICATORS 2 A municipality must review its key performance indicators annually as part of the performance review process referred to in regulation 13. Whenever a municipality amends its integrated development plan in terms of section 34 of the Act, the municipality must, as part of the process referred to in regulation 3, review those key performance indicators that will be affected by such an amendment. 1 Performance Management Regulations (Chapter 3, Regulation 12) 2 Performance Management Regulations (Chapter 3, Regulation 11) Tshwane IDP First Revision 466

5 6.3.8 DEVELOPING A MONITORING FRAMEWORK 3 Performance monitoring is an ongoing process that runs parallel to the implementation of the agreed IDP. The monitoring framework must: Identify the roles of the different role players in monitoring and measuring the municipality s performance; Allocate specific tasks to the gathering of data and submission of reports; Determine the data that must be collected in order to assess performance, how that data is to be collected, stored, verified and analyzed and how reports on that data are to be compiled; Provide for reporting to the municipal council at least twice a year; Be designed in a manner that enables the municipality to detect early indications of under-performance (organisational and employee [Human Resources] performance management); Provide for corrective measures where under-performance has been identified (organisational and employee [Human Resources] performance management); and Compare current performance with performance during the previous financial year and baseline indicators THE PERFORMANCE MEASUREMENT FRAMEWORK The Balanced Score Card Model was adopted as the model to be used in the City of Tshwane and is aimed to measure performance using four perspectives, i.e. customer, internal processes, financial and learning and growth. The Balanced scorecard, developed by Kaplan and Norton, is used to achieve the following: Clarify and translate vision and strategy; Plan, set targets, and align strategic initiatives; Communicate and link strategic objectives and measures throughout the organisation; Enhance strategic feedback and learning; Align Departmental and personal goals to the strategy; 3 Performance Management Guidelines (Paragraph 5.4) Tshwane IDP First Revision 467

6 Link strategic objectives to long term targets and annual budgets and ensuring that the strategy is continuous; Identify and align strategic initiatives; Perform periodic and systematic strategic initiatives; Perform periodic and systematic strategic reviews; and Provide feedback to learn about and improve strategy. THE BALANCED SCORE CARD MODEL Service Delivery Perspective Financial Perspective Vision and Strategy Internal Processes Perspective Learning and Growth Perspective Diagram 6.1: The Balanced Score Card Model CONDUCTING PERFORMANCE REVIEWS Performance review is a process where the organization, after measuring its own performance, assesses whether it is doing the right thing by using either of the following methods: Analysis 4 Analysis requires the interpretation of the measurements to determine whether targets have been met and exceeded and projections on whether future targets will be met. Where 4 Performance Measurement Guidelines (Paragraph 5.4.2) Tshwane IDP First Revision 468

7 targets are not being met, analysis requires that the reasons should be examined and corrective action recommended. Benchmarking Look at the municipality s performance by comparing it with other similar ones, by way of a benchmarking exercise. Surveys Look at what the people think about the performance of the municipality across the range of services, by way of customer surveys or other community feedback mechanisms REPORTING ON PERFORMANCE Reporting requires that the municipality takes the priorities of the organization, its performance objectives, indicators, targets, measurements and analysis, and present this information in a simple and accessible format, relevant and useful to the specific target group, for review. The City of Tshwane s score card template that has been adopted for reporting is set out in section 4 of this chapter INDIVIDUAL PERFORMANCE In order to ensure that the City of Tshwane meets and deliver on its City Scorecards KPA s and KPI s at a high standard, it is appropriate to introduce a performance management system for the individual employees within the City. If each employee achieves his/her performance objectives, which are linked to the department s objectives, which are in turn linked to the City Scorecard, then the COT will ultimately achieve its organizational performance indicators. The link between organizational performance and individual performance is as follows: Tshwane IDP First Revision 469

8 Performance measurement rests on the following two pillars: The identification of the selected few strategic objectives/1st level strategic objectives (inclusive of the 7NKPI s) which summarises the performance of the whole organisation and which are the result of focussed strategic planning. These objectives are captured in the top down design of the city score card. Individual performance measurement which provides the bottom up measurement data for the measurement of performance of 1st level strategic objectives. Key in rolling out effective individual performance measurement is an understanding of assumptions and allocation (delegation) of responsibility and accountability within the performance management system. An example is given: The city wants to accelerate higher and shared economic growth and development (Strategic objective). The successful achievement of this will be measured by the growth in the city s economy as measured by the Gross Value Added (GVA) measure. This measure takes into account the total money value of all products produced in the city less the taxes plus subsidies on products. Currently this figure stands at between 5% and 6% for Tshwane. It is assumed that if the city management creates the right economic environment, the city s economy will grow, i.e. more products will be produced and that will in turn increase the number of jobs in the economy. There are however a number of factors outside the city management s control that also influences this figure e.g. if the rand s value decreases and more goods are exported, the products that are produced might increase and therefore the GVA might increase regardless of whether the city created a favourable environment or not. This level of indicator can therefore not be directly devolved to an individual s scorecard not even the municipal manager, since he is not responsible for adopting policy only for implementing it. This level of indicator therefore needs to be unpacked into an individual level indicator, e.g.: Tshwane IDP First Revision 470

9 It is assumed that the city s economy will grow if there are more products or services produced; therefore, attracting companies to do their business in the city becomes a key performance area: Such a key performance area could read: Leverage growing and strategic sectors in the city in a way that optimize investment opportunities A suitable measure for this could be: The number of enterprises locating in the COT in relation to the baseline (i.e. the current number of enterprises). this is a suitable measure for the Municipal Manager s scorecard. The decision of an enterprise as to where it locates is dependent on a number of favourable factors, e.g. the availability of raw materials for production, the availability of suitable land, the access to value adding products and services, e.g. transport facilities to airports or ports. The Municipal Manager must now decide which departments could contribute towards ensuring favourable circumstances for businesses and allocate specific responsibilities to them. This means he will assume that some activities will contribute more towards attracting business investment than others. The following activities may be identified: Availability of suitable commercial/business property and easy processes and procedures through the City Planning Department for changing land use rights, etc; Easy access to commercial connections for water and electricity; Reasonable / Competitive rates for businesses; and Well maintained access routes (Roads). For each of the above different indicators will be developed and included in the relevant departmental head s scorecard. Two broad approaches are used within COT to manage the performance of employees: Approach 1: Performance contracts and performance agreements Approach 1 applies to the Municipal Manager, COO, SEO s and GM s. These will be signed on annual basis in compliance legislative requirements and best practices. The agreements for fixed term contract employees are linked directly to reward as per the Remuneration Policy of the Municipality. Tshwane IDP First Revision 471

10 Approach 2: Personal Score Cards Approach Approach 2 applies to all permanent employees to manage their performance. The link to reward will initially be non-financial. Financial rewards will ultimately be determined through the Collective Bargaining process at South African Local Government Bargaining Council (SALGBC). To ensure the above the following policies were adopted: Performance management policy and procedure; Policy for the management of poor work performance; Performance reward scheme; Non-financial rewards for permanent employees; and Remuneration policy. Currently the use of scorecards is rolled out to the levels of managers and deputy managers in the CoT. 6.4 THE COT 5-YEAR STRATEGIC OBJECTIVES (2006/ /2011), KEY PERFORMANCE AREAS, KEY PERFORMANCE INDICATORS AND TARGETS PROGRESS WITH IMPLEMENTATION UP TO THE SECOND QUARTER OF APPROVED CITY STRATEGIC OBJECTIVES The approved five (5) City Strategic Objectives are as follows: To provide quality basic services and infrastructure; To accelerate higher and shared economic growth and development; To fight poverty, build clean, healthy, safe and sustainable communities; To foster participatory democracy and Batho Pele principles through a caring, accessible and accountable service; and To ensure good governance, financial viability and optimal institutional transformation with capacity to execute its mandate. Tshwane IDP First Revision 472

11 6.4.2 CITY OF TSHWANE SCORECARD WITH PERFORMANCE PROGRESS UP TO THE SECOND QUARTER OF 2006/07 We report on the third quarter against a backdrop of some important events that took place in our city during the intervening period. These events include the State of the City Address which will be debated today in Council, the launch of the Progressive Women Movement in the Gauteng Province and the handover of the remains of the Mamelodi four to the Freedom Park last week. The aforementioned events took place as the country was celebrating human rights month. We had to assess our own contribution and progress we have made as a city to the struggle of deepening and consolidating this human rights culture in Tshwane. The Bill of rights as enshrined in our Constitution enjoins us as local government to deliver basic services to our people including access to clean and portable water, basic shelter, safety and security. Therefore in reporting progress we have made during the period under review we will attempt to cover these issues. Accordingly, as a city we don t want to create a perception that the work we do is of cosmetic or academic nature but it is meant to change the lives of our people for the better. Maybe I should hasten to condemn the vandalism of water reservoirs in Mamelodi last week by those in our society who seek to reverse the gains we have made in providing basic services to our communities. This led to the interruption to water supply in various areas of Mamelodi. Our law enforcement agencies are working around the clock to ensure that this does not happen again in future and that culprits are brought to book. The performance report is evaluated against the five city strategic objectives, key performance areas (KPAs), Key performance indicators and targets as contained in the approved Five Year City Scorecard. And these include the following: To provide quality basic services and develop infrastructure; To accelerate higher and shared economic growth and development; To fight poverty, building clean, healthy, safe and sustainable communities To foster participatory democracy and Batho Pele principles through caring, accessible and accountable service; and To ensure good governance, financial viability and optimal institutional transformation. Tshwane IDP First Revision 473

12 1. Provision of quality basic services and infrastructure Housing Electricity Water, Sanitation Planned target 3 rd Quarter Number of top structures provided (4500) Formalise 13 settlements by June 2007 Actual performance 3 rd quarter 5812 (exceeded our target) 12 already formalised and 6 in process. Exceeded our target Complete 190 family units at hostels. 98 completed. Expected shortfall of 70 by end of financial year due to delays in approval of plans. Nr. of completed and houses electrified (4285 ) Nr. of completed and occupied households in Winterveldt electrified ( ) Construction of water reservoir to be completed in Hammanskraal west Nr of residential stands provided with water connections planned at houses were electrified. Construction has to be completed in other houses before electrification 6579 connected Target exceeded during the 3 rd quarter. Construction was completed according to plan. Target achieved have been connected. Annual target of exceeded Roads & Storm water 100% of informal settlements to receive water 26.73km of roads to reduce backlogs 2.5km of new roads for growth and 224.8km maintained 100% supplied with water. Target reached 24, 5 km achieved. Target can still be reached before the end of 3 rd quarter km constructed and 420.8km maintained Target exceeded 15.1km of storm water drainage to be constructed to reduce backlogs 23.1 km constructed. Target exceeded Solid Waste removal 7500 access to solid waste removal Tenders pending approval of type of containers. Target not met Appointment of SMME contractors Use of local labour 38 were to be appointed 52 have been appointed in parks and waste management 20% increase in the use of local labour The service departments use local labour in all their projects. Target exceeded. 2. To accelerate higher and shared economic growth and development 1022 SMME s received assistance from the municipality; R63 million investment into the local economy has been achieved; through partnerships; and Tshwane IDP First Revision 474

13 2659 short term jobs were created. All designs for public transport facilities completed 9 bad buildings are being renovated and 12 have been completed 3. To fight poverty, building clean, healthy, safe and sustainable communities indigents registered by city and receive free basic services; 7 applications for housing developments close to economic opportunities were approved. Two events were held to promote a culture of competitive sports activities which include City to City Marathon and Mayoral Golf Day 98% of households now have access to primary health care within a radius of 5km. 8 programmes were implemented for the youth to alleviate poverty. 10 initiatives were implemented to benefit vulnerable groups, like the Boikanyo project for people living with disabilities. 4. To foster participatory democracy and Batho Pele principles through caring, accessible and accountable service 2 multipurpose centres have been completed to assist in the provision of one stop services. One in Winterveldt and another in Nellmapius Ward committees have been capacitated and are 100% functional in all areas. 5. To ensure good governance, financial viability and optimal institutional transformation. Tshwane development Agency establishment proceeding as planned The completed Business case gap analysis will ensure efficiencies in fleet management which will lead to a saving. The match between billing and property valuation has been completed There is a reduction in the % of municipal debt over 90 days the planned reduction was 77% (annual target) but 66% was achieved for the quarter. The response rate to customer enquiries has been reduced from 42 days to 34 days. The call centre received calls in this quarter and were handled immediately. Tshwane IDP First Revision 475

14 83.7% of metres were read which means that most of the bills are not estimates but billed on actual consumption. The micro structure to up to level 5 has been approved, this will aid in service delivery to be moved closer to the people. 50 unemployed learners were accepted into our learnership programme. The City of Tshwane continues to make strides as can be seen but it still has challenges as well. We have issued over 1500 title deeds to residents in Garankuwa Extension 23. This area enjoys full services such as tarred roads, street trees, parks, public lighting and quality storm water drainage. The project was funded by both the Northwest province and City of Tshwane to the tune of R120 million. On 31 March we will be completing the electrification project in Winterveldt. The municipality will also be handing over housing to residents of Olievenhoutbosch. The mix settlement housing project is a joint initiative of the City of Tshwane, National Housing Department and ABSA Bank. This is a further testimony that it is possible deliver quality houses for various income groups without affecting value of the properties concerned. On matter of the 2010 World Cup, the City of Tshwane as one of the ten host cities in South Africa, has started work in earnest in this regard. All mechanisms that are needed to ensure successful hosting of the Cup have been established. We will be appointing engineers next month to start with upgrading of Loftus Versveld Stadium. Furthermore, the 2010 project office will be capacitated within the next two months. As a City we are concerned about the spending patterns especially with regard to our capital programme and we would want to assure you that this will be improved later in the financial year. Today in Council we will be tabling a report on our supply chain management which aims to refine our policies in this regard so as to improve the turn around time in service delivery. The implementation of the Alternative Service Delivery Mechanisms means the municipality is committed to serving people in caring manner. Very soon five regions will become operational and the officials will become accessible to all our areas in the Tshwane. The aim of this model is to achieve organisational efficiencies and ensure that we bring services closer to our people. The macro structure has been finalised up level 5 and we plan Tshwane IDP First Revision 476

15 to finalise the entire organisational by the end of April As indicated earlier in the year we will be finalising appointments of senior staff by April this year FINANCIAL PROGRESS This section covers the actual financial progress made with the implementation of the operating budget and capital budget in the second quarter of 2006/07 financial year OPERATING BUDGET The report on the operating budget is attached as Annexure A. For the period July Marchof 2006/07 financial year, 71.2% (R5,824,345,000 of R8,176,969,000) of operating budget was spent CAPITAL BUDGET The report on the capital budget is attached as Annexure C. Summary of Spending of Capital Expenditure and Progress on Implementation of Capital Projects The budget for capital projects in 2006/07 is R1, 586,651,000. A total of ± 339 capital projects were planned for implementation in the 2006/07 financial year. For the period July-March of the 2006/2007 financial year, 34% (R539, 215,000 of R1, 586,651,000) of capital budget was spent. The report below summarises progress on implementation of capital projects by end March 2007: Energy and electricity 29 of 30 projects have commenced. R of R (59%) was spent by end March. R of R was assigned (including R commitments) by end March. Tshwane IDP First Revision 477

16 The department electrifies in tranches for economies of scale as per the delivery of houses. Materials have been purchased and targets for electrification will be met, including the capital expenditure. Housing, City Planning and Environmental Management 80 of 82 projects have commenced. 2 large projects (Olievenhout and Thorntree view) to a value of approximately R50M have been completed by developers. Payment claims have been submitted to Province for approval, and once these are approved the funds will be paid out to the developers. DIVISION BUDGET ACTUAL COMMITMENT ASSIGNED AVAILABLE % (ASSIGNED) City Planning R R R R R Housing R R R R R Environmental Management R R R R R TOTALS R R R R R Roads and Stormwater 56 of 87 projects have commenced, and 7 have been completed. 42.5% ( R ) of R (as per the adjustments budget) has been spent, with R committed. Specific community level projects have experienced delays, for example due to community engagements and the presence of graves in the road side. These particular issues will have to be resolved for certain projects to continue. The details can be found in annexure A (target 1.1.6) Tshwane IDP First Revision 478

17 Water and sanitation All 60 projects have commenced %( R ) of R has been spent and a further R has been committed. The delivery of certain projects was delayed due to late approvals and availability of materials in the engineering sector. The projects are however on track, and there department has monitoring systems in place to ensure that targets are met. Health and Social Development All 16 projects have commenced. 42% (R ) of the total budget (R ) as allocated during the adjustments budget has been spent, and R has been committed. The original budget allocated to the department was R The department is on track to spend the budget allocated and to achieve the targets, as the additional funding was applied to projects already in implementation. Economic Development 35 of 39 projects have commenced and R 21.5% (R ) of the adjusted budget has been spent. An additional R is committed. A number of projects have been taken over from the COO office since October 2006 and are in various stages of implementation. The department projects an 80% expenditure of the capital budget by end June 2007 due to a number of factors, including delays in the process of appointing contractors. Corporate services 9.6% (R ) of the adjusted budget of R has been spent and R has been committed. Tshwane IDP First Revision 479

18 Metro Police R ( 10.5%) of the adjusted budget of R has been spent, with and additional R committed. Three projects of the metro police have been delayed for various reasons: the fibre cables project tender has been driven by IMD, and the head of Corporate services has provided assurances that this project will be realised. The Control room project was halted due to lack of funding for year 2 of a multi year project. The weighbridges project might have to go out on tender again, as only one company tendered, which did not meet all the specifications. Legal and secretarial services 9% (R ) of R has been spent. These funds are used for the purchase of land which cannot be linked to specific projects (general servitudes). Departments budget for land purchases for specific projects. Emergency management services R (2.7%) of R has been spent. R has been committed for the purchase of vehicles which the department is awaiting arrival of REVENUE GENERATION The revenue realized up to the end of March 2007 is, 74.6 % (R6,403,502,000 of R8,587,559,000). Tshwane IDP First Revision 480

19 ANNEXURE A: OPERATING REVENUE AND EXPENDITURE PROGRESS FOR THE 1 ST THREE QUARTERS ENDED 31 MARCH 2007 A1: OPERATING REVENUE BY SOURCE Original Budget 2006/07 Adjustments Budget 2006/07 Adjusted Budget 2006/07 Projections 2006/07 (YTD) Actuals 2006/07 (YTD) Variance (Actual vs Projection) Actuals vs Projections Actuals vs Adjusted Budget Actuals vs Original Budget Full Year Forecast 2006/07 Reasons for Variances >10% (YTD) Chapter 6: Performance Management System Corrective Measures / Actions Taken (YTD) Schedule 1 Operating Revenue by Source R'000 R'000 R'000 R'000 R'000 R'000 % % % R'000 Property rates ( ) ( ) ( ) ( ) ( ) ( ) % 76.63% 79.62% ( ) Realised 11.69% more than originally projected If revenue in this group exceeds the budget projection, the for the 3rd quarter. additional revenue will be declared at year-end with the Corporate Deviations Report. Service charges - electricity revenue ( ) ( ) ( ) ( ) ( ) % 68.38% 69.15% ( ) Realised 6.03% less than originally projected for the 3rd quarter. Service charges - water revenue ( ) ( ) ( ) ( ) ( ) % 71.42% 71.42% ( ) Realised 8.17% less than originally projected for the 3rd quarter. Service charges - sanitation revenue ( ) ( ) ( ) ( ) ( ) ( 2 242) % 78.73% 78.73% ( ) Realised 1.24% more than originally projected for the 3rd quarter. Service charges - refuse removal ( ) ( ) ( ) ( ) ( ) % 66.42% 66.42% ( ) Realised 10.78% less than originally projected for the 3rd quarter. Regional Services Levies - turnover 0 ( ) ( ) ( ) ( 4 504) % 28.15% ( ) Recovery of arrear levies over 2 year grace period. Provided R16 m during the Adjustments budget. Regional Services Levies - remuneration If revenue target in this group is not realised, the variance will be declared at year-end with the Corporate Devaitions Report. If revenue target in this group is not realised, the variance will be declared at year-end with the Corporate Devaitions Report. If revenue in this group exceeds the budget projection, the additional revenue will be declared at year-end with the Corporate Deviations Report. If revenue target in this group is not realised, the variance will be declared at year-end with the Corporate Devaitions Report. This revenue has been discontinued since 1 July 2006 in compliance with National Government directive. All amounts collected reflect the receipt of levies relating to the period prior to the 2006/07 financial year. Required adjustments will be made at year-end ( 2 331) ( 2 331) 0 Recovery of arrear levies over 2 year grace Similar to the Regional Services Levies above, required period. Included R4 m in RSC Levies Turnover adjustments will be made at year-end. during the Adjustments budget. Rental of facilities and equipment ( ) ( ) ( ) ( ) ( ) ( 5 926) % 76.41% 82.68% ( ) Realised 16.01% more than originally projected If revenue in this group exceeds the budget projection, the for the 3rd quarter. additional revenue will be declared at year-end with the Corporate Deviations Report. Interest earned - external investments Interest earned - outstanding debtors ( ) ( ) ( ) ( ) ( ) ( ) % % % ( ) Realised % more than originally projected for the 3rd quarter. ( ) ( ) ( ) ( ) ( ) ( 5 606) % 77.04% 81.82% ( ) Realised 5.61% more than originally projected for the 3rd quarter. Fines ( ) ( ) ( ) ( ) ( ) ( 2 317) % 69.94% 56.68% ( ) Realised 8.40% more than originally projected for the 3rd quarter. Licences and permits ( ) ( ) ( ) ( ) ( ) % 41.68% 41.68% ( ) Under collection of 32.61% against projections for 3rd quarter Government Grants and subsidies - Operating Government Grants and subsidies - Capital Revenue in this group exceeds the budget projection. The additional revenue will be declared at year-end with the Corporate Deviations Report. If revenue in this group exceeds the budget projection, the additional revenue will be declared at year-end with the Corporate Deviations Report. If revenue in this group exceeds the budget projection, the additional revenue will be declared at year-end with the Corporate Deviations Report. If revenue target in this group is not realised, the variance will be declared at year-end with the Corporate Devaitions Report. ( ) ( ) ( ) ( ) ( ) ( ) % 85.38% 88.19% ( ) Realised more than originally estimated. Mainly Departments are required to monitor all grants receivable for due to Equitable Share transfer of R417,7m in their respective departments and ensure collection thereof 3rd quarter. during next quarter. ( ) ( ) ( ) ( ) ( ) % 56.07% 41.31% ( ) Actual recognition of revenue dependant on grants received and capital expenditure. Other income ( ) ( ) ( ) ( ) ( ) ( ) % 71.33% 93.19% ( ) Realised 4.19% more than originally projected for the 3rd quarter. Public contributions, donated & contributed PPE CITY OF TSHWANE - BUDGETED PARENT ENTITY STATEMENT OF FINANCIAL PERFORMANCE Financial Year 2006/07 Year to Date Performance of Revenue and Expenditure ( ) ( ) % % % 0 Contributions for township establishmment, etc not budgeted - to be corrected with year-end report Gains on disposal of PPE ( ) ( ) ( ) ( ) ( ) ( 5 898) % % % ( ) Sale of obsolete assests realised more gains on disposal Total Revenue By Source ( ) ( ) ( ) ( ) ( ) ( ) % 74.57% 75.79% ( ) Departments are required to monitor all grants receivable for their respective departments, to ensure collection and appropriate expenditure thereof during next quarter. If revenue in this group exceeds the budget projection, the additional revenue will be declared at year-end with the Corporate Deviations Report. Revenue in this group exceeds the budget projection. The additional revenue will be declared at year-end with the Corporate Deviations Report. Revenue in this group exceeds the budget projection. The additional revenue will be declared at year-end with the Corporate Deviations Report. Note: The figures reflected under Adjusted budget 2006/07 in column 3 refers to the Budget adjustments in terms of the Fund Transfer Policy. Tshwane IDP First Revision 481

20 A2: OPERATING REVENUE BY PER STRATEGIC UNIT CITY OF TSHWANE - BUDGETED PARENT ENTITY STATEMENT OF FINANCIAL PERFORMANCE (BY DEPARTMENT/STRATEGIC UNIT) Financial Year 2006/07 Year to Date Performance of Revenue and Expenditure Original Budget 2006/07 Adjustments Budget 2006/07 Projections 2006/07 (YTD) Actuals 2006/07 (YTD) Variance (Actual vs Projection) Actuals vs Projections Actuals vs Adjusted Budget Actuals vs Original Budget Full Year Forecast 2006/07 Operating Revenue By Department R'000 R'000 R'000 R'000 R'000 % % % R'000 General assessment ( ) ( ) ( ) ( ) ( ) % 93.49% 98.24% ( ) Governance ( 189) ( 189) ( 139) ( 339) ( 201) % % % ( 189) Municipal Manager 0 ( 4 733) ( 2 366) ( 735) % 0.00% 0.00% ( 4 733) Finance ( ) ( ) ( ) ( ) ( ) % 84.63% % ( ) Corporate Services ( ) ( ) ( ) ( ) % 59.10% 64.23% ( ) Legal ( 352) ( 352) ( 264) % % % ( 352) Economic Development ( ) ( ) ( ) ( ) % 59.82% 68.97% ( ) Health and Social Development ( ) ( ) ( ) ( ) % 34.59% 38.11% ( ) Emergency Management ( ) ( ) ( ) ( ) ( 2 746) % 83.31% 83.63% ( ) Metro Police ( ) ( ) ( ) ( ) ( 1 391) % 67.62% 62.70% ( ) Housing ( ) ( ) ( ) ( ) % 41.59% 35.45% ( ) Roads and Stormwater ( ) ( ) ( ) ( 9 276) % 12.85% 12.64% ( ) Water & Sanitation ( ) ( ) ( ) ( ) % 70.15% 71.29% ( ) Electricity ( ) ( ) ( ) ( ) % 67.92% 68.65% ( ) Total Operating Revenue ( ) ( ) ( ) ( ) ( ) % 74.57% 75.79% ( ) 0 Tshwane IDP First Revision 482

21 A3: OPERATING EXPENDITURE BY GROUP CITY OF TSHWANE - BUDGETED PARENT ENTITY STATEMENT OF FINANCIAL PERFORMANCE Original Budget 2006/07 Adjustments Budget 2006/07 Adjusted Budget 2006/07 Projections 2006/07 (YTD) Actuals 2006/07 (YTD) Financial Year 2006/07 Year to Date Performance of Revenue and Expenditure Variance (Actual vs Projection) Actuals vs Projections Actuals vs Adjusted Budget Actuals vs Original Budget Full Year Forecast 2006/07 Reasons for Variances >10% (YTD) Schedule 1 Schedule 2 Operating Expenditure by Vote Employee related costs ( ) 97.67% 70.84% 71.85% Under expended by 2.33% against projections for 3rd quarter, mainly due to delay in filling of vacancies owing to ASD implications. Remuneration of Councillors % 78.43% 78.43% Over expended by 4.67% against projections for 3rd quarter, mainly due to incorrect implementation of National directives. Bad debts % 93.09% 93.09% Realised 24.12% higher than originally projected for the 3rd quarter. Collection costs % 80.41% 80.41% Realised19.04% higher than originally projected for the 3rd quarter. Depreciation ( ) 96.11% 70.21% 70.21% Realised 3.89% lower than originally projected for the 3rd quarter. Repairs and maintenance % 64.64% 73.02% Realised 32.74% higher than originally projected for the 3rd quarter. Interest paid ( ) 54.79% 41.09% 41.09% Realised 45.21% lower than originally projected for the 3rd quarter. Rebates have been received. Bulk purchases % 77.61% 78.27% Realised 1.6% higher than originally projected for the 3rd quarter. Corrective Measures / Actions Taken (YTD) If expenditure target in this group is not realised, the variance will be declared at year-end with the Corporate Devaitions Report. In terms of resolution to be corrected before yearend. Bad debts written-off approved by council resolution to be declared at year-end with the Corporate Deviations Report. If expenditure target in this group is exceeded, the variance will be declared at year-end with the Corporate Devaitions Report. As the Asset Register is finalized the Depreciation will be corrected systematically. Departments should ensure that budgeted repairs and maintenance is effected. Changes to the VAT Act will effect the expenditure in this group at yearend. Interest payments for loans are payable quarterly (Sept, Dec, Mar & June). Rebates have also been received from banks on certain structure loans. If expenditure target in this group is exceeded, the variance will be declared at year-end with the Corporate Devaitions Report. Grants and subsidies paid ( 3 675) 57.58% 43.18% 43.18% Mapping of costs incorrect. To be corrected during June. General expenses % 63.88% 67.08% Realised 30.91% higher than originally projected for the 3rd quarter. To be monitored by all departments over next quarter. Changes to the VAT Act will effect the expenditure in this group at year-end. Loss on disposal of PPE % % % 0 Asset register clean-up and audit corrections on scrapping of assets. Internal recoveries ( ) ( ) ( ) ( ) ( ) % % 45.28% ( ) Adjusted budget in SAP excludes internal costs and recoveries - reporting on primary costs only Operating Expenditure by Vote % 71.23% 73.73% (SURPLUS)/DEFICIT (1) ( ) ( ) ( ) ( ) ( ) % % % ( ) Note: 1. The figures reflected under Adjusted budget 2006/07 in column 3 refers to the Budget adjustments in terms of the Fund Transfer Policy. 2. Adjusted budget in SAP excludes internal costs and recoveries reporting on primary costs only. 3. Budget for Interest Paid moved to General & Assessment Rates As the Asset Register is finalized the Loss on Disposal of Property, Plant & Equipment, will be corrected systematically. Internal recoveries will be corrected at year-end with finalisation of the statements. Tshwane IDP First Revision 483

22 A4: OPERATING EXPENDITURE PER STRATEGIC UNIT CITY OF TSHWANE - BUDGETED PARENT ENTITY STATEMENT OF FINANCIAL PERFORMANCE (BY DEPARTMENT/STRATEGIC UNIT) Financial Year 2006/07 Year to Date Performance of Revenue and Expenditure Original Budget 2006/07 Adjustments Budget 2006/07 Projections 2006/07 (YTD) Actuals 2006/07 (YTD) Variance (Actual vs Projection) Actuals vs Projections Actuals vs Adjusted Budget Actuals vs Original Budget Full Year Forecast 2006/07 Operating Expenditure By Department 0 General assessment % 95.54% 78.46% Governance ( 937) 98.76% 64.65% 76.75% Municipal Manager ( ) 82.27% 43.88% 50.36% Finance ( ) 79.79% 54.65% 55.51% Corporate Services % 75.71% 78.31% Legal ( 1 297) 97.52% 68.86% 69.57% Economic Development % 72.92% 80.34% Health and Social Development ( 1 393) 99.32% 62.21% 70.04% Emergency Management ( ) 89.72% 68.69% 68.83% Metro Police % 71.27% 73.26% Housing % 75.47% 78.16% Roads and Stormwater % 69.12% 69.59% Water & Sanitation % 73.24% 76.32% Electricity % 71.06% 74.34% Total Operating Expenditure % 71.23% 73.73% (SURPLUS)/DEFICIT ( ) ( ) ( ) ( ) % % % ( ) Note: Adjusted budget in SAP excludes internal costs and recoveries reporting on primary costs only. Budget for Interest Paid moved to General & Assessment Rates Tshwane IDP First Revision 484

23 ANNEXURE C: CAPITAL BUDGET PROGRESS FOR THE 1 ST TWO QUARTERS ENDED 31 MARCH 2007 C1: CAPITAL EXPENDITURE PER STRATEGIC UNIT Capital Expenditure for the CTMM per Strategic Unit to 31 March 2007 Additional commitment information Strategic Unit/Department Approved Original Budget Approved Adjusted Budget Expenditure Projections Jul '06 - Mar '07 Actual Expenditure Jul '06 - Mar '07 Variance (Actual vs Projection) Actual as % of Adj. Budget Actual as % of Exp. Projection Commitment (YTD) Electricity % 98.4% Service Delivery: % 84.8% Roads & Stormwater % 93.6% Water & Sanitation % 77.3% Social Development % 103.4% Metro Police % 58.1% Legal & Secretarial % 20.9% Housing % 85.4% Finance % 5.8% Economic Development % 82.4% Corporate Services % 44.8% Emergency Management Services % 92.6% Municipal Manager % 0.0% Total % 86.4% Assigned (YTD) Available Tshwane IDP First Revision 485

24 C2: CAPITAL EXPENDITURE PER FUNDING SOURCE Funding Source Capital Expenditure for the CTMM per Funding Source to 31 March 2007 Approved Original Budget Adjusted Budget Projections to 31 Mar 2007 (YTD) Actuals to 31 Mar 2007 (YTD) Variance (Actuals vs Projections) Actuals vs Projections Actual vs Adjusted Budget R'000 R'000 R'000 R'000 R'000 % % Council Funding ( ) 87.18% 36.61% Provincial Grants & Subsidies ( 3 246) 76.74% 41.66% Government Housing Program ( ) 63.25% 36.29% Municipal Infrastructure Grant (MIG) ( 4 660) 96.72% 66.62% National Electricity Regulator (NER) ( 4 235) 83.06% 72.60% Total ( ) 86.28% 41.20% Tshwane IDP First Revision 486

25 6.5 CHALLENGES POLICY FRAMEWORK The City of Tshwane acknowledges 5 that there is a link between organizational performance management and individual performance management and illustrates it as per the diagram below: When the policy framework is however further explained as per diagram below, the linkage to the organizational level of planning is lost and the focus become the last grey box of the previous diagram which refers to individual performance: 5 See Performance Policy and Procedure document of the City of Tshwane Tshwane IDP First Revision 487

26 The Performance management policy and procedure needs to be updated furthermore, to allow for changes in the IDP as well as new individual performance management regulations published in 2006 by the Department of Local Government in August PLANNING FOR PERFORMANCE MANAGEMENT According to the local government planning and performance management regulations of 2001: 7. (1) A municipality s performance management system entails a framework that describes and represents how the municipality s cycle and processes of performance planning, monitoring, measurement, review, reporting and improvement will be conducted, organised and managed, including determining the roles of the different role-players. (2) In developing its performance management system, a municipality must ensure that: (a) the system complies with all the requirements set out in the Act; (b) demonstrates how it is to operate and be managed from the planning stage up to the stages of performance review and reporting; (c) clarifies the roles and responsibilities of each role-player, including the local community, in the functioning of the system; (d) clarifies the processes of implementing the system within the framework of the integrated development planning process; (e) determines the frequency of reporting and the lines of accountability for performance (f) relates to the municipality s employee performance management processes; and (g) provides for the procedure by which the system is linked to the municipality s integrated development planning processes Tshwane IDP First Revision 488